The “Fiscal Cliff” fiasco may be behind us (maybe), but the deal that supposedly brought the nation “back from the edge” is a mixed bag for green energy proponents. Though the bill offers some decidedly positive endorsements for renewable energy industries and biofuels, experts are having well-founded concerns about the future implications of this bill for green energy in the US. Here’s what the bill offers, where it’s problematic, and why it matters.
The American Taxpayer Relief Act (with the unfortunate and probably permanent moniker “the Fiscal Cliff deal”) includes a range of provisions for business research and experimentation (R&E) and renewable energy. Several tax credits that would have expired at midnight on December 31, 2012 have been renewed for 2013. Tax credits for wind energy are notable, allowing taxpayers to claim 2.2 cents for each kilowatt hour of wind electricity used and allowing renewable energy facilities to claim a 10-year credit. According to Innovation Trail, preliminary estimates assert that the new law will cost about $12.1 billion over 10 years.
According to The Energy Collective, biofuels interests were also big winners in the Fiscal Cliff wars. Tax credits were revived, extended, or renewed for cellulosic ethanol, algae, and biodiesel. Bob Dinneen, president and CEO of the Renewable Fuels Association, commented that the bill’s ethanol provision showed “the Obama Administration’s stalwart support of biofuels and Congress’s belief in the promise of energy independence and job creation through domestic renewable energy resources.”
The Devil’s In the Details…
So how “green” is the new bill? Here, the details matter. For example, Section 406 allows continued coal subsidies for coal produced on Native American lands as part of the production tax credit that helps out renewable energy interests. The cost is comparatively minimal (about $1 million) but it’s an important indicator that not all the clean-energy provisions in this bill are really clean—or really green.
On the other hand, Section 403 extends a credit for “2- or 3-wheeled plug-in electric vehicles.” That bump for electric scooters (or e-scooters) is both a potential business boost and a greener means of getting to work on time. That’s a pretty positive add-on… but since those scooters are still illegal in some states, it’s quite an interesting choice. For these and other awkward add-ons, check out HeraldNet’s “10 weird parts of the ‘fiscal cliff deal.”
Framing the Debate, Narrowing the Options
This bill is an excellent example of the ways that people in power can shape definitions of “what is green.” By playing up renewable energy and biofuels tax breaks and subsidies, the government asserts its “green-ness” and commitment to a sustainable future while framing the available options as Big Business interests.
When Steven Lukes released his Second Edition of Power: A Radical View in 2005, he had this kind of manifestation of power in mind. Lukes envisioned three “dimensions” of power. The third dimension is the kicker, and comes into play when people act willingly in ways that are actually contrary to their best interests. Here, business subsidies and tax breaks for big energy farms may not actually be in the country’s best long-term interests, but when the Congress says, “look how green we are!”, we still applaud.
In the same year, Juan Martinez-Alier wrote Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation. Martinez-Alier emphasized the question: Who has the power to simplify complex arguments? When the government reduces the complexities and problems of sustainability to a few items in a bill, choosing to emphasize what will be seen as our greatest hopes for long-term ecological health, they simplify the debate—and control the viability of the options on the table.
In this case, whether inadvertently or by design, the government has approved renewable energy and biofuels producers as major players in a sustainable future, worthy of governmental support even in such tight times. That’s a powerful statement.
Green and Green
Some energy experts say the Fiscal Cliff deal has made them optimistic. Manik Roy, Vice President for Strategic Outreach at the Center for Climate and Energy Solutions, said “It demonstrates that even in the very difficult environment we find ourselves in now, where there’s bipartisan support for something, there is an opportunity” (As reported on governorswindenergycoalition.org). Opponents of the bill, including Benjamin Zycher of the American Enterprise Institute, have their concerns. For Zycher, these subsidies are resulting in under-priced energy, causing distortions in current efficiency while increasing the potential for rocking the market in future years.
The bill does give us some hope that major lobbying efforts have the power to shift the tide toward environmental, ecological, and “green economic” interests in the coming years. But this bill is a clear indicator that those in power are flexing their theoretical muscles in an effort to bound the dialogue on “green-ness” in ways that support big industry and the monies that come along for the ride.